Dragons’ Den: Series 15, Episode 11

Back after a brief hiatus, last night’s episode of Dragons’ Den seemed to be on a bit of a health kick.

News Years’ resolutions were in full force as a date-based smoothie brand, a free-running exercise programme and even a range of healthy dog food vied for investment in the Den; all followed by two award-winning health and safety products.

But only two of these start-up businesses enticed the Dragons with a juicy opportunity. Read on to learn which entrepreneurs secured funding for their start-up, and why they were successful…

Dragons’ Den success story: Poppy’s Picnic

Founders: Dylan Watkins and Louise Mackintosh
Concept: Raw, natural dog food brand
Investment sought: £60,000 in exchange for 5% equity
Investment received: £60,000 for 15% equity (Deborah Meaden)

The winning pitch

With their “secret weapon” – also known as Poppy the dog – in tow, business partners Dylan Watkins and Louise Mackintosh entered the Den to pitch their natural raw dog food range.

Launched in October 2016 and handmade by butchers in Wiltshire, Poppy’s Picnic aims to feed dogs what they are “designed to eat” in the wild.

With a goal of minimising the lesser-known canine obesity epidemic (Mackintosh explained that 55% of UK dogs are actually obese) and prices which Watkins claimed were easy on owners’ wallets (feeding a dog of Poppy’s size would cost 55p per day), by summer 2017 the start-up’s turnover had hit £40,000 per month.

The Dragons were on side, and after Watkins shared some healthy sales numbers, an impressed Tej Lalvani raised hackles instantly by putting an early offer on the table: all of the money for 15% equity.

However, after the duo predicted a whopping £800,000 gross profit and £300,000 net profit as early as year three, the Dragons (including a now-distressed Lalvani) grew sceptical.

Though Watkins asserted that their high gross margin was possible thanks to “machinery and new practises” that will produce 2.5 million units by year three, Peter Jones was unconvinced that their forecasts were realistic and declared himself out.

Dog-lover Deborah Meaden, however, was tempted by the opportunities offered by the brand’s upcoming cat food range. The duo assured her that they were well into the process of testing recipes and adapting packaging for what Meaden called this “more compelling” market.

Won over, the Dragon made an offer of £60,000 for 15% equity. Touker Suleyman followed, matching this, and self-proclaimed “mad dog lady” Jenny Campbell offered the same – despite her calculation that feeding her own three large dogs with Poppy’s Picnic would actually cost £9 a day (a far cry from 55p).

Hesitant to part with 15%, Watkins and Mackintosh considered walking away during their private discussion at the wall. But when the stony-faced Dragons made it clear they’d be sticking at 15%, the duo decided Meaden’s expertise was worth the sacrifice and accepted her offer.

Company finances

Turning over £40,000 a month at the time of filming.

UK sales:

• Sales made in October 2016: £7,000
• January 2017: £14,000
• March 2017: £17,500
• April 2017: £23,500

International sales:

• Shipped £19,000 worth in April 2017
• The end of April saw an order for £44,000 come from Hong Kong

Forecasts:

• 2017: £24,000 profit
• 2018: £160,000 net profit
• 2019: £1.9m revenue with £800,000 gross profit and £300,000 net profit

What the Dragons said:

Tej Lalvani: “It’s a good business, you’ve done well so far. I think the market’s great in terms of raw food, and I’m very impressed with your research and development on the products. My company, we have actually launched supplements and vitamins for dogs. I think it’s great synergy with our pet vitamins and nutrition. I’m going to do something I’ve not done – I’m going to give you an offer straight away.”

Peter Jones: “I don’t believe the forecasts you’ve put together, because I think that seems very high. I’m not buying into the financial return. So, I’m going to say, sadly, I’m out.”

Deborah Meaden: “In terms of what I could bring, I’ve got food manufacturing. In terms of the dog side, I will tell you – Jenny’s a judge in dog shows and whatever – but I’m saying I have quite an authentic voice within the dog community. I’ve obviously got the contacts in the retail. It’s a well-trodden path for me.”

Touker Suleyman: “You’re very investable. The brand’s very investable. I have, at home, no dogs. So, if I was an investor, I would have no knowledge on dog food. But I have a lot of knowledge about manufacturing, packaging, distribution, finance… I think I could add a lot of value to you.”

Jenny Campbell: “With three offers on the table, I just need to tell you what I would add. I have taken a business and transformed that business in terms of its operational processes from end to end, I took that into four countries. I am passionate about dogs and they are a very important part of my life, as are all animals. I do think this is a massive opportunity.”

Dragons’ Den success story: Glazesafe Limited

Founder: Daniel Cheddie
Concept: Two products which help construction workers safely carry out window repairs and other projects at height
Investment sought: £60,000 in exchange for 10% equity
Investment received: £60,000 for 30% equity (Touker Suleyman and Jenny Campbell)

The winning pitch

In the final pitch of the episode, full-time firefighter, designer and family businessman Daniel Cheddie entered the Den, seeking investment for his two award-winning, health and safety-inspired construction products.

Having joined his family’s window repair business aged 19, Cheddie designed the Sashmate, which holds windows in place during repairs, to stop himself from falling out of (or dropping) windows.

Later, he designed the Stronghold – a mobile anchor point and barrier system which keeps workers safe while working at height – for a construction company, saving it £77,000 on scaffolding and winning it a £1m contract.

After sturdy beginnings, the pitch stalled when Jones argued that it might be easy for another entrepreneur to build similar products to these – and when it turned out that Cheddie hadn’t brought his patent for the Dragons to examine, an exasperated Meaden explained that a product’s “whole value sits in its patent”.

Lalvani, though, was more concerned by Cheddie’s numbers, and questioned why the entrepreneur had only sold 75 of his Sashmate tools. Cheddie explained that he is a designer first and not at all a salesman – a risky statement to make in the Den. Campbell, upon hearing he had secured no pre-sales, suggested Cheddie might be suffering from “entrepreneurial freeze”.

Also worried by this, Meaden – who has her finger very much on the construction industry’s pulse – expressed concern that there’d been no word-of-mouth growth for the products. But the investor was brought back from the brink of opting out when Cheddie said his innovations had saved a firm £2m on scaffolding, as well as helping it secure a ten-year contract.

However, despite his joking that “there must be something else I’ve forgotten to tell you that will change your mind!”, Jones, Lalvani and Meaden declined to invest in Cheddie’s products.

But Suleyman saw opportunity in the products’ innovation and life-saving potential – though he felt that investing would mean taking a big chance – and offered half the money for 20%.

Campbell, who had also been in two minds, decided to take the leap, and offered half the money for a decidedly more kind 10% equity.

Suleymen dropped his offer to 15%, which Campbell matched. After asking the pair to drop to 12%, which Suleyman refused – “It’s a punt,” was his simple explanation – Cheddie accepted their offer.

Company finances

• The products cost £1,152 to make and retail at £2,820
• At the time of filming, Cheddie had sold 75 Sashmate tools, 150 accessories, and eight Strongholds.

What the Dragons said:

Peter Jones: “It’s a great product. But I sit here in this chair to look for people that I can invest in and businesses I can get behind, and look to where I can help, where I can add value, and at the same time think, ‘right, where’s the future of this business?’ And I don’t see the business. I genuinely believe that you should license this to people who will do a really good job for you. So, sadly, I’m going to tell you that I’m out.”

Tej Lalvani: “When I want to invest in a company, I need to be excited about the product, obviously. For some reason, it doesn’t excite me. The other aspect is the number of sales you’ve done is quite concerning. So I wish you the best, but I’m out.”

Touker Suleyman: “Daniel, your pitch, your explanation, all the patents you’ve got – you’re miles and miles ahead of anybody I’ve seen for a while. Would you say that if I wanted to invest, it would be a punt?”

Deborah Meaden: “My gut instinct is telling me there’s a market, it’s just not huge. And the fact that enough people in the construction industry have seen this by now, I should have heard about it. I should have heard it in the buzz. Somebody should have been telling me about it. So I’m really sorry, but I won’t be investing, Daniel.”

Jenny Campbell: “I’m musing over, you know, has this product got legs, is it going to take off? But it is a bit of a leap in the dark, and you do need some help on the commercial side. And part of me is going ‘no, just don’t do this!’ But there’s also a bigger part saying, ‘why don’t we give this a go?’ I think we can do something with this.”